We study optimal incentive contracts offered to a research and development (R&D) manager, who can propose an innovative project and is in charge of conducting this project. The manager has private information about the project profitability and he exerts unobservable levels of different kinds of...

Am 28. Januar 2014 veranstaltete das ifo Institut gemeinsam mit dem Bayerischen Handwerkstag ein Symposium unter dem Titel »Energiewende 2.0 – Was getan werden muss, um unsere Energieversorgung wieder auf ein sicheres Fundament zu stellen!«. Die Veranstaltung unter der Moderation von Ursula...

Real world investment decisions are generally made sequentially, over time. Management must consider the possibility of subsequent decisions like suspending a project when an initial investment decision is made. This consideration seems to be particularly important in the case of investments,...

Performance measures based on residual income are increasingly popular. The academic lit-erature shows that residual income has important incentive properties when management bases investment decisions on the net present value (NPV) rule. My analysis focuses on the case in which investment...